$DXY down, $BTC up - The crazy (but logic) correlation

3 maj

BTC just printed a "magical" green candle, after a kinda "bearish" upward movement with a lot of divergences. No one was expecting an upward movement like this, and really caught bears and shorters by surprise. The short squeeze here was brutal and a lot of shorters must be in pain.

Anyone could be asking themselves, "what the hell just happened?". This is the time where traders blame "manipulation" and "market makers" as the ones who move the market to their interests, with such a, we could say, "irracional" price action.

Well... There COULD be an explanation.

Historically DXY (The index that measures the strenght of US Dollar in the financial market) have had an inverse correlation to the price of Bitcoin and viceversa.

It has some kind of logic, since, if Bitcoin is bought with dollars, then if dollar lose its value, then you need more dollars to buy Bitcoin! simple math, simple logic. We are not sure if the graphs are 100% correlated themselves, but it makes sense!

Here you can see that I applied the DXY graph over BTC graph, but the DXY is INVERTED, meaning that every time DXY went up, you can see it here going down. So you can see now more clearly the direct correlation both have.

DXY just broke a trendline and printed a very strong red candle JUST at the very same time BTC did y massive green candle a liquidated short positions at very important sell zones.

It's kind of easy to predict a big movement of any of both, if one of them does a big move at some point, because you can expect the other to do a big move at the same time or some time later.

Keep an eye ALWAYS on DXY when you are trading Bitcoin or any crypto.

It IS a finantial advice.